Allianz emission intensity up 6.4% year on year in commercial insurance unit
(The Insurer) - Allianz grew its revenue from sustainable solutions in the P&C business to 4.9 billion euros ($5.3 billion) in 2024, marking an increase of 63% from the prior year.
However, emissions intensity in the commercial business also saw an increase, the German carrier said in its annual report.
Allianz's latest annual sustainability statement marked its first annual report that is fully compliant with the EU's Corporate Sustainability Reporting Directive.
Revenue in terms of GWP from low-carbon solutions grew by 25% compared to the 2022 baseline, primarily driven by growth in onshore wind, solar and electric vehicle battery manufacturing.
Investments described as sustainable grew by 2.7% in 2024 to 171.9 billion euros.
Allianz reported a 50.7% reduction in absolute greenhouse gas emissions in its corporate proprietary investments against a 2019 baseline, in line with its target to achieve a 50% reduction by 2030.
The group also saw a reduction in absolute carbon emissions in its motor retail insurance business by 6.8% compared to the 2022 baseline, with a 30% reduction target for in-scope motor retail portfolios in nine European markets by 2030.
Commercial insurance emission intensity in 2024 stood at 0.23 kilotonnes of carbon dioxide equivalent per 1 million euros. This marked an 11.7% reduction from the 2022 baseline, but a 6.4% increase compared to 2023.
For commercial insurance, Allianz is targeting a 45% reduction between 2022 and 2030 in the insurance-associated emissions intensity of the in-scope sub-portfolio of large corporate companies insured by Allianz Global Corporate & Specialty.
Currently, emission accounting methodologies are available for 13% of premiums in the commercial segment.
Insurance-associated emissions for a commercial insurance policy is equal to the Scope 1 and 2 emissions from the policyholder multiplied by the attribution factor provided by PCAF (insurance premium of the policy divided by the revenue of the customer).
The Allianz Standard for Integration of Sustainability contains four energy-related guidelines applied to proprietary investments and P&C insurance (including facultative reinsurance): thermal coal, oil sands, oil and gas, and renewable/low-carbon energy.
"The three fossil fuel guidelines define business practices and business models where we do not provide further services or investments along defined technical exclusion criteria. They typically differentiate between single-site restrictions (which apply to standalone P&C covers, as well as direct project investments) and restrictions on company-level exposures," the report outlined.
"To support renewable and low-carbon technologies, we allow ring-fenced coverages of and investments into projects of companies that are otherwise restricted due to the fossil-related energy guidelines."
The report continued that, within the commercial P&C business, insured parties may be subject to climate change-related litigation in future owing to alleged greenwashing incidents, responsibility for damages due to historical greenhouse gas emissions, and other potential issues.
"For our retail business, customers may require new products or coverages in response to decarbonisation-related lifestyle changes; Allianz may also suffer reputational damage if our own decarbonisation efforts fall short of stakeholder expectations," it said.
"Some risks may be offset with premium increases, but tangential issues such as insurance affordability for customers, difficulty in pricing risks with limited historical risk data, or increased loss ratio volatility may present challenges."
